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The impact of COVID-19 on corporate digital innovation in China: A study based on the DDD model

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  • Zheng, Panpan
  • Li, Zhen
  • Zhuang, Ziyin

Abstract

This study uses text analysis and machine learning methods to construct an index of firms' digital innovation, and employs the triple difference method (DDD) to empirically examine the impact of the COVID-19 on digital innovation of Chinese listed companies. We find that firms' digital innovation, particularly in terms of digital product innovation, has increased after the COVID-19 outbreak, and the promotion of COVID-19 on digital innovation is more pronounced among low-leverage, non-declining periods, and tertiary industry firms. Our results imply that despite the adverse effects brought about by the COVID-19, such as cash flows constrains and revenues reductions, the opportunities it presents for firms' digital innovation cannot be ignored.

Suggested Citation

  • Zheng, Panpan & Li, Zhen & Zhuang, Ziyin, 2024. "The impact of COVID-19 on corporate digital innovation in China: A study based on the DDD model," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011261
    DOI: 10.1016/j.frl.2023.104754
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    More about this item

    Keywords

    COVID-19; Digital innovation; DDD; Text analysis;
    All these keywords.

    JEL classification:

    • K30 - Law and Economics - - Other Substantive Areas of Law - - - General
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other

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